International Trade

Brexit

Brexit for European road transport operations

Brexit – what happens now?

The Government gave official notice to leave the EU (a notification under Article 50 of the EU Treaty), on the 29 March 2017. View our flowchart explaining the Article 50 process.

In 2016 the Prime Minister announced the ‘Great Repeal Bill’, to be passed just prior to the UK’s exit from the EU when all EU derived legislation will be embedded in to domestic UK law, therefore ensuring that international freight transport operations will see continuity of the rules on the day after leaving the EU. The Government, and Parliament, will then be able to review whether these rules could be adapted into new ‘national’ rules to better suit domestic UK operators.

In March 2017, the Government published The Repeal Bill: White Paper that sets out the steps to be taken to prepare for Brexit. It confirmed that all laws will be transferred into UK law en bloc so there will be very little scope to amend legislation before the Great Repeal Bill but it did reiterate the government’s desire for trade to flow with as little impediment as possible.

Due to other international agreements and rules applicable in the EU, international operators will be required to adhere to these rules when operating outside of the UK, so up to date knowledge of these will be necessary to ensure all journeys remain fully compliant. FTA will continue to update members as discussions progress and the future arrangements become clearer.

Many issues will need to be addressed in the negotiations up to and post Brexit, foremost of which is what the future trading relationship between Britain and the EU will look like. This will ultimately dictate the documentation, tariffs and any restrictions that international operators will face.

However, it must be stressed that up until the UK leaves the EU all the rules and obligations (and penalties) remain valid and should continue to be adhered to.

The key issues for cross-border movements

These negotiations will be incredibly complex and FTA’s job will be to lead for logistics and make sure the Government keeps the UK’s supply chains efficient and competitive, whatever deal is agreed. The documentation required to accompany goods, vehicles and drivers will need to be unambiguous and universally accepted to avoid arbitrary enforcement and penalties being imposed. FTA supports the Prime Minister’s call for as frictionless trade as possible.

UK logistics will need to remain vigilant against unilateral decisions adding red tape to cross-border movements. Current experience suggests that international hauliers are vulnerable to unilateral action by enforcement authorities in EU member states, for example the evidence of payment of the minimum wage required in France and action over the registration of trailers in Germany. The enforcement of whatever new rules are agreed has the potential to become a major cause of delay and burden for international movements. This means that getting clarity on what documentation for goods, certificates for trucks and licences for drivers are required is a crucial element in making any new trade arrangement work in practice.

Juxtaposed controls enable customs and immigration procedures to be carried out in France for in-bound freight movements and in Kent for out-bound movements. If this arrangement ceases, this is something that would cause huge disruption to cross-Channel movements as services would be limited by the capacity of the UK Border Agency to process vehicles disembarking in Kent. There have been a number of calls for the Treaty obligations to be dismantled and for the controls to be repatriated. FTA continues to impress on the governments of both countries to maintain the Treaty unchanged.

Brexit survey results

In July 2016, FTA’s international road haulage members were invited to respond to a survey that asked questions based on the ‘exit’ result of the EU Referendum. Views were sought as to short and long term opinions and what would need to be put in place by the government to enable trade to continue with the least amount of barriers being erected.

In the short term, members were quite pessimistic as to developments for their companies with 64 per cent stating that there would be a negative effect but the outlook wasperceived as slightly less gloomy for the longer term as this figure dropped to a 50 per cent negative effect. This could demonstrate the strength of members’ ability to adapt to new situations as there were a number of comments making it clear that it was simply too early to make a precise judgement and we would have to wait until the new deal has been agreed.

When asked to choose the top three priority areas that members would want policy work to be concentrated on, the overwhelming majority stated that ‘continued full access to the single market’ was the number one priority for them. In second place came ‘tariff-free access for goods to the single market’ and in third place was ‘preservation of access to the single market for services’. None of these choices come as a surprise, given the nature of the companies responding. The UK might have a relatively strong hand here on this access point in the negotiations with the remaining EU member states, given the massive imbalance in cross-Channel trade, with the domestic fleet making up around 15 per cent of the vehicles entering the UK.

The final, clear message coming from the results was that members are very keen to retain the ability to hire non-UK drivers and that these drivers would have the right to work in both the UK market and in the single market. Again, not a great surprise that labour mobility issues were at the forefront of members’ views and another issue that FTA will be pressing on the UK government when the negotiations begin, after the triggering of the formal exit procedure. The FTA Chief Executive, David Wells, raised this as one of the key items in a meeting with the Secretary of State for Transport, Chris Grayling, in October 2016.

Need more information?

If you are an FTA member and have a query regarding this topic, or need more information, contact our Member Advice Centre